Boost in stocks and shares to bring an age of 'golden pensions'

PENSION savers are set for a golden retirement as investments soar.

The booming stock market is set to start a large pensions windfall [GETTY/MODELS USED]

Experts predict that 2014 will mark the start of a 15-year boom in stocks and shares.

They say this year has brought an upturn in the fortunes of some of the UK’s biggest companies – and ­savers whose pension pots are invested in those firms can expect to see their values leap.

According to Richard Buxton, one of Britain’s leading fund managers, the FTSE 100 index of ­Britain’s top shares is set to smash through the 7,000-mark this year.

That would take the value of Britain’s leading companies to levels not seen since the current record high of 6,950 points was set in December 1999 – shortly before the dotcom crash.

If we really are about to see a 15-year bull market, it could not have come at a better time for pension ­savers

Craig Palfrey, of Increase Your Pension

The investment bank Citi has gone even further, predicting the FTSE will surge past 8,000 points.

Craig Palfrey, of advisers Increase Your Pension, said: “If we really are about to see a 15-year bull market, it could not have come at a better time for pension ­savers, many of whom have not enjoyed the returns they had hoped in recent years.

“Pensions are a long-term ­investment, and investments inevitably can go down as well as up depending on stock-market performance.

“However, for those who are five to 10 years off retirement, and have seen their pensions stutter over the past decade, it would be a welcome boost to have a prolonged period of stock market growth.”

Malcolm McLean, a senior consultant at investment specialists Barnett Waddingham, said: “Projections of continuing good stock market returns are great news for investors and particularly for would-be pension savers.

The stocks success of Britain's leading companies haven't been this high since 1999 [GETTY]

“They should also encourage those employers struggling to fund and maintain for their workers final salary schemes that have increasingly been closed down in the private sector on cost grounds.

“The outlook for pensions is now as bright as it has been for many years – and a lot of credit must go to the Government for many reforms they have made or are making to a pension system that was falling into disrepute.”

Mr Buxton based his forecast partly on the performance of the stocks and shares market since the mid-19th century. He said: “There are plenty of headwinds to growth but these are widely known and are reflected in share prices. With today’s starting valuations, history suggests investors will make very good returns over the next 10 to 15 years.”

David Schwartz, a stock market historian, conducted a similar analysis in 2001. It showed roughly 15-year bull and bear cycles since the 1850s, excluding the First and Second World Wars.